Gov. Gavin Newsom throws California into battle against...

1of12Governor Gavin Newsom salutes to the crowd after taking the oath of office during his inauguration ceremony in Sacramento, California, on Monday, January 7th, 2019.Photo: Gabrielle Lurie, The Chronicle

2of12Gov. Gavin Newsom takes the oath of office from state Supreme Court Chief Justice Tani Cantil-Sakauye on Monday in Sacramento. Looking on is Newsom's wife, Jennifer Siebel Newsom, and their sons, Dutch, second from right, and Hunter, right.Photo: Rich Pedroncelli / Associated Press

7of12Governor-elect Gavin Newsom gives a fist bump to his son Hunter Newsom (left) ahead of taking the oath of office during his inauguration ceremony in Sacramento, California, on Monday, January 7th, 2019.Photo: Gabrielle Lurie / The Chronicle

SACRAMENTO — Gov. Gavin Newsom proposed a broad overhaul of health care on his first day in office Monday, promising to throw the state’s financial power into an effort to lower prescription drug costs, expand Obamacare so middle-class families can receive subsidies to buy insurance, and offer Medi-Cal coverage to undocumented immigrants up to age 26.

Newsom aides said the expansion of Affordable Care Act subsidies would be funded by a California version of the individual mandate, the former federal requirement that people either carry health insurance or pay a penalty on their taxes. Congressional Republicans and President Trump repealed the mandate in 2017, although the penalty does not disappear until the 2019 tax year. Newsom would reinstate it on the state level.

Newsom offered little detail about how much the proposals would cost or what other changes would be needed to pay for them. Aides said more details would be available when the governor unveils his first budget Thursday. But leaders in the Democratic-dominated Legislature say there is general support for the ideas.

The ideas represent a step toward universal coverage for all California residents, Newsom’s aides said. Three million Californians, half of them undocumented immigrants, do not have health insurance, and premiums for many people who do have coverage are soaring.

Politically, it is also an early sign that Newsom will pursue large-scale ideas that treat California, the world’s fifth-largest economy, as a nation-state when Washington is too gridlocked to pass legislation.

Newsom took that nation-state concept a step further Monday when he signed an executive order to create the position of a California surgeon general, who will examine the “root causes of serious health conditions, such as adverse childhood experience.”

But the big-ticket item was Newsom’s executive order that could make California the biggest single purchaser of prescription drugs in the country through Medi-Cal, the state’s Medicaid program for low-income people.

Public and private purchasers of prescription drugs now negotiate prices with pharmaceutical companies on their own, often in a fragmented way. Newsom’s order directs state agencies to purchase prescription drugs together to have greater leverage in negotiating lower prices, something the new governor hopes will lead to a ripple effect of lower prices for other customers.

Together, Medi-Cal customers make up the largest purchaser of pharmaceutical services in California. Newsom’s order will enable the Department of Health Care Services to negotiate on behalf of all 13 million Medi-Cal beneficiaries, as opposed to only 2 million now.

On Thursday, Newsom also propose to extend Medi-Cal eligibility to undocumented immigrant adults up to age 26 who otherwise meet the program’s eligibility requirements. For the past two years, California has covered undocumented youths until they turn 19. Raising the age would extend benefits to as many as 138,000 undocumented immigrants, Newsom aides said.

Newsom’s budget will also include a proposal to raise the income ceiling to become eligible for premium subsidies under the Affordable Care Act.

Now, individuals making more than $48,000 a year or a family of four earning more than $98,000 don't qualify for financial assistance. Newsom’s proposal would lift those ceilings for individuals to $72,840, and for a family of four to $150,600. If approved, that would make California the first state in the nation to offer subsidies to individuals and families with incomes of more than 400 percent of the federal poverty level.

Newsom aides said the tax penalty for not having coverage would be the same as it was under the federal mandate — in most cases, $695 per adult or a family maximum of $2,085.

“It’s about time,” Assemblyman David Chiu, a San Francisco Democrat who has been a leader in Legislature on health care issues, said of Newsom’s plans. “The drug pricing crisis is something that should be dealt with nationally. But the failure of Washington to act means that we — California — have to act.”

Chiu pointed to the new governor when asked how to fund the proposals.

Joe Garofoli is the San Francisco Chronicle’s senior political writer, covering national and state politics. He has worked at The Chronicle since 2000 and in Bay Area journalism since 1992, when he left the Milwaukee Journal. He is the host of “It’s All Political,” The Chronicle’s political podcast. Catch it here: bit.ly/2LSAUjA

He has won numerous awards and covered everything from fashion to the Jeffrey Dahmer serial killings to two Olympic Games to his own vasectomy — which he discussed on NPR’s “Talk of the Nation” after being told he couldn’t say the word “balls” on the air. He regularly appears on Bay Area radio and TV talking politics and is available to entertain at bar mitzvahs and First Communions. He is a graduate of Northwestern University and a proud native of Pittsburgh. Go Steelers!